Fraudulent claims in Gulf oil spill investigated by feds

As oil spill claims czar Kenneth Feinberg wraps up emergency payments and begins processing final claims in the Gulf oil spill, the government's fight against fraudulent BP claims is kicking into high gear, with a former Gretna restaurateur the latest to be caught in the dragnet.

The Associated Press archiveKenneth Feinberg, manager of the Gulf oil spill relief fund, said he's careful to distinguish between possible fraud and overreaching claims that simply try to 'beat the system.'

Feinberg said this week that he considers from 2,000 to 3,000 of the 460,000 claims he has received to be "very suspicious" and "will send any claims that appear to be fraudulent to the (U.S.) Department of Justice."

The FBI and Gulf Coast U.S. attorneys' offices are encouraging people to call the federal toll-free disaster fraud hotline at 877.623.3423 or to report suspected cases of fraud by e-mailing tips to disaster@leo.gov.

Federal prosecutors, the FBI, the U.S. Secret Service and the U.S. Postal Inspection Service are cooperating in the effort, which is similar to disaster fraud investigation efforts established after Hurricane Katrina.

The anti-fraud effort is already paying dividends. The Justice Department announced last week that seven people have been indicted for trying to defraud BP or Feinberg's Gulf Coast Claims Facility, which took over the administration of the claims process from BP on Aug. 23.

"The charges ... send a strong message that we will not tolerate any fraudulent activity designed to profit from this tragic oil spill," said Assistant U.S. Attorney General Lanny Breuer of the Justice Department's Criminal Division. "The Department of Justice and federal law enforcement agencies are placing a high priority on the prompt investigation and prosecution of all forms of fraud related to this disaster."

Federal prosecutors in New Orleans filed an indictment Friday charging Cam T. Hang of Gretna with one count of mail fraud, alleging she fraudulently collected a $42,000 emergency payment by claiming losses from a seafood restaurant called C.H. Food Mart Inc. In fact, she sold the business in April 2009, more than a year before the oil spill, according to the indictment.

Also last week, an Alabama man was indicted after submitting allegedly false pay stubs for a $13,000 claim; an Alabama woman was charged with filing fraudulent documents to collect $20,000 from Gulf Coast Claims Facility; a criminal complaint was unsealed against a Michigan man who collected $9,000 from BP; and a Mississippi man was accused of filing a false tax identification number, false state and federal tax returns, a false business permit and false sales receipts to get $180,000 from BP and the Gulf Coast Claims Facility.

Two other indictments for allegedly false spill claims were filed in Texas and North Carolina in November.

Feinberg said he has staff members who are responsible for checking the legitimacy of documents such as fishing licenses and tax returns, and has brought in forensic accountants to analyze files. He also said his office was responsible for alerting federal authorities to the cases that led to indictments last week.

Among claims he has investigated is one by an alleged boat owner who had "no such boat," Feinberg said. In another case, someone in another Gulf Coast state "hung a shingle claiming to be GCCF ... trying to bilk individuals" of their rightful claims.

But Feinberg said he's careful to distinguish between possible fraud and overreaching claims that simply try to "beat the system." He said that when thousands of Plaquemines Parish claimants filed the same mass-produced letter claiming losses of subsistence fishing it was illegitimate, but not fraudulent.

"I think it's one thing if people simply try to take advantage of the program to get more money" than they deserve, Feinberg said. "But I don't think that's fraud."